By: Lane F. Kelman and Casey J. McKinnon
The District of Columbia Universal Paid Leave Act (Act) creates a paid leave system funded by employers to provide employees with paid parental, family, and medical leave.
Beginning on July 1, 2019, each “covered employer” must contribute an additional 0.62% in payroll taxes for each “covered employee” to fund the paid leave system. A “covered employer” is one that pays DC unemployment insurance taxes and has at least one “covered employee.” A “covered employee” is an individual that spent 50% or more of their time working in DC during the past year. Covered employers with five or more covered employees must register with the DC Department of Employment Services (DOES) via an online portal.
The employer contribution is in addition to any other benefits provided to employees, such as short-term disability or paid sick leave. The Act defines “wages” broadly to include commissions and cash bonuses. As is the case with unemployment tax collection, taxes under the Act are collected quarterly. Employers are required to make a report of and pay the contributions for a quarter no later than the last day of the month following the close of each quarter. As such, a covered employer’s first report and payment are due by October 31, 2019.
Beginning on July 1, 2020, covered employees may claim paid parental (up to eight weeks), family (up to six weeks), and medical leave (up to two weeks) benefits under the Act. The particular amount paid from the fund to each employee is based on their individual wages.
Covered employers must post a paid leave program notice provided by DOES at each worksite in a conspicuous place where notices are customarily posted, and also must send the notice to remote-covered employees. Further, employers must provide the notice to employees annually, to new employees within 30 days of hiring, and to any individual claiming leave for a qualifying event. Employers should retain copies of each notice and obtain signed statements from employees acknowledging receipt of the notice in order to document compliance.